Q&As

In the sale of a property by a mortgagee, how can the buyer ensure that the former mortgagor vacates the property prior to completion. Do they have an overriding interest (ie actual occupation) and can it be overreached?

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Published on LexisPSL on 21/09/2018

The following Property Q&A provides comprehensive and up to date legal information covering:

  • In the sale of a property by a mortgagee, how can the buyer ensure that the former mortgagor vacates the property prior to completion. Do they have an overriding interest (ie actual occupation) and can it be overreached?
  • Overriding interests
  • Overreaching interests
  • Obtaining possession from mortgagor

In the sale of a property by a mortgagee, how can the buyer ensure that the former mortgagor vacates the property prior to completion. Do they have an overriding interest (ie actual occupation) and can it be overreached?

Overriding interests

An overriding interest is an interest in property which amounts to an exception to the general rule that in respect of registered land, any interest or right must be registered in order to bind a purchaser. They are interests to which a registered title is subject, even though they do not appear on the register. The interest must be proprietary in nature. They are binding both on the registered proprietor and on a person who acquires an interest in the property.

In the case of dispositions, an interest is overriding only if:

  1. the occupier is in actual occupation of the land at the time of the disposition, and either

    1. the occupation is obvious on a reasonably careful inspection of the land, or

    2. the buyer/mortgagee knows about the interest. Actual knowledge is required and not mere suspicion

There is no single test for actual occupation. The meaning has been refined through case law. A number of factors must be considered including:

  1. the degree of permanence and continuity of presence of the person concerned

  2. their intentions and wishes

  3. the length of absence from the property and the reason for it,

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